• CMI Legal

Keepin' It Casual: New Amendment for Casual Employees

The Fair Work Amendment Act 2020 (Supporting Australia’s Jobs and Economic Recovery) was introduced in late 2020, creating significant changes to providing clarity in determining whether an employee is a casual employee, providing security for employers, and providing support and security for casual employees through casual conversion entitlement.

There were various changes made in the Amendment Act, which now identifies a casual employee as someone who is offered a job that does not include firm advance commitment that the work will continue indefinitely with an agreed pattern of work, and that the employee accepts knowing that there is no firm advance commitment. This is determined by the employer having the ability to choose when to offer work, the employee being able to choose whether to accept or reject work, the employee working based on the needs of the employer and being entitled to a loading or rate of pay made under a contract.

Due to the lack of security for casual employees, forgoing entitlements to service-related benefits (annual leave, personal/carer’s leave, payment for absences on public holidays, redundancy pay, and payment in lieu of notice of termination), they instead receive a casual loading. Further clarifications around classifying casual employees have been made, with regular patterns of hours not necessarily being a firm advance commitment to continuing.

The casual conversion regime was introduced to provide security and enhanced prospects for employees, with an obligation on all employers (excluding those with fewer than 15 employees) to offer all eligible casual employees an opportunity to convert to full-time or part-time employment. The requirements for eligibility are that the casual employee has been employed for at least 12 months, with a regular pattern of hours on an ongoing basis for the past 6 months. This allows for less significant adjustments when converting from a casual employee to a full-time or part-time employee.

There are also many requirements that allow employers to determine whether a casual employee is not eligible to accept the offer, such as the position of the employee ceasing to exist in 12 months, the hours of the employee being significantly reduced after the conversion, or the conversion creating a ‘significant change’ where the employee cannot be accommodated for or is unavailable for work. The conversion must also involve patterns of work hours that are consistent with the hours worked in the previous 6 months for employees, and the offer must be written and made within 21 days of the one-year anniversary of the employee. If an offer is not made to an employee, a notice needs to be provided, explaining why an offer was not made.

A new provision has also been provided by the Amendment Act, addressing situations where employees have been wrongly classified as casual employees, with them being paid a loading. The act allows employees to make claims for an amount, and the court hearing the matter must reduce the claim amount appropriately to reflect the loading paid to the employee. However, employees cannot be made to reimburse an employer for any amount, as the amount paid cannot be reduced below zero.

The Fair Work Amendment Act has come into effect as of the 27th of March 2021, allowing employers to receive protection and security in return for the ongoing obligations and requirements of the casual conversion process.